The Bank of Israel's Composite State of the Economy Index for October remained stable (an increase of just 0.06 percent), compared with the persistent increases in the months following the first lockdown. This change attests to the effect of the tightening of the second lockdown on economic activity. The second lockdown, which began in mid-September as a “breathing lockdown”, was tightened toward the end of September, and continued as a full lockdown until mid-October. The gradual exit from the lockdown began on October 18. Since most of the data for compiling the Index are obtained with a lag, the index for October still does not reflect most of the change in economic activity resulting from the second lockdown. The stability of the Composite Index in October reflects an increase in two of the Index’s components, a decline in two others—particularly in consumer goods imports—and stability in the remaining three components that were reported for September–October. Table 2 presents the development of components of the Index in the past few months.
A revision of the data for previous months shows that economic activity between May and September was significantly greater than previously reported, and that in the third quarter as a whole, there was an increase in activity. These revisions are due to the Central Bureau of Statistics’s return to calculating seasonally adjusted data for most series, and to the built-in statistical smoothing in the calculation of the Index (Table 1).
In view of the uniqueness of the crisis and the resulting measurement difficulties, the intensity of the changes in the Index should not be used as an indicator of the precise intensity of changes in economic activity, and particularly not regarding the relative intensity between various months.
Detailed explanations regarding how the Composite Index is calculated, as well as detailed long-term tables, can be found at
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Table 1: Revisions in the Composite Index
|
Revision |
Previous figure |
New figure |
|
October 2020 |
|
0.06 |
|
September 2020 |
0.13 |
0.28 |
|
August 2020 |
0.03 |
0.42 |
|
July 2020 |
-0.07 |
0.08 |
|
June 2020 |
0.21 |
0.74 |
|
May 2020 |
-0.64 |
0.86 |
Table 2: Changes in the Index components in recent months♦
(monthly percent change, unless otherwise noted)
|
|
October 2020 |
September 2020 |
August 2020 |
July 2020 |
|
Industrial Production Index (excluding mining and quarrying) |
|
3.9 |
2.0 |
-3.0 |
|
Services Revenue Index (excluding education and public administration) |
|
0.2 |
2.9 |
2.2 |
|
Retail Trade Revenue Index |
|
-2.9 |
-0.6 |
0.7 |
|
Imports of consumer goods2 |
-4.9 |
10.4 |
-0.7 |
5.0 |
|
Imports of manufacturing inputs (excluding fuels) |
0.2 |
3.0 |
-1.1 |
0.9 |
|
Goods exports (excluding agriculture)1 |
1.6 |
11.7 |
4.8 |
-11.0 |
|
Services exports (excluding transportation)2 |
|
|
1.3 |
4.8 |
|
Number of employee posts in the private sector |
|
|
0.6 |
0.0 |
|
Job vacancy rate in the business sector3 |
2.3 |
2.3 |
2.4 |
2.0 |
♦ Since the Central Bureau of Statistics did not calculate seasonally adjusted series for some of the variables, there may be inconsistencies between some of the variables appearing the Composite Index tables and Central Bureau of Statistics publications.
1 Goods imports and exports are calculated in fixed prices (adjusted for changes in foreign trade price indices).
2 Services exports are calculated in real terms using the Consumer Price Index, and are comprised of the export of other business services and the export of tourism services.
3 The job vacancy rate is calculated out of the total number of employed people, and is included in the index at its seasonally level.
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